SoftBank’s problem solver faces his biggest challenge yet: WeWork

Claure owns over 1M shares of SoftBank stock, valued at $19.9M, down 30% since May

Marcelo Claure and Softbank CEO Masayoshi Son (left) (Credit: Linkedin, iStock, Pixabay)
Marcelo Claure and (left) Softbank CEO Masayoshi Son (Linkedin, iStock/Illustration by Alexis Manrodt for The Real Deal)

In late September, SoftBank Group’s Marcelo Claure took to Twitter to share his goals for the upcoming month. He wanted to beat his best running time, try a dish he had never had before, watch more soccer games, and figure out his daughter’s Halloween costume.

A Twitter follower responded: Fix WeWork.

With a track record of creating billion-dollar companies from scratch and also turning around sinking ships, the 48-year-old billionaire Bolivian native is now tasked with his biggest challenge yet: restoring order and a path to profitability to the office startup that his boss Masayoshi Son staked his reputation on, a firm that many believe is the poster child for all that’s wrong with venture-capital-fueled startups.

Claure, handpicked by Son, is taking on WeWork at a crucial time. It has a new executive team with little real estate experience, $45 billion in U.S. debt obligations, and only enough cash on-hand to fund operations for a few months. Because of the failed IPO and cash-crunch, thousands of layoffs are expected.

Claure declined to comment.

With WeWork, Claure is expected to cut costs and boost revenue — much as he did at Sprint Corp. In 2014, when he stepped in as CEO of the telecommunications company, it was losing nearly 8,000 customers a day. Three years later, it was adding nearly 14,000 customers a day.

Claure went to “dramatic extremes to improve Sprint’s network and gain customers,” said Mike Dano, who covered the wireless industry as a reporter and editor. That included offering steep promotions and discounts in an effort to bring in more customers.

While the company’s financials improved under Claure’s watch, the perception of its core product — cell phone reception— did not, he said.

“It might be better than before but it’s certainly not great,” said Dano, editorial director of Light Reading’s 5G & Mobile Strategies. “He slowed the bleeding but he did not reverse the [damage].”

“You don’t have to do what people tell you”

Claure’s rise to the top is the stuff of lore. A serial entrepreneur as a child who was a mediocre student at American international schools, Claure completed his degree in economics and finance at Bentley College in 1993. He got his big break when he sat next to the newly-appointed Bolivian Football Federation president on a flight. By the time he landed in Quito, he had a job as general manager. After a World Cup tournament in 1994, he struck out on his own and moved back to Boston. Needing cash, he sold his frequent-flyer miles for $2,000. But when he needed to fly back to Bolivia a week later, he was told the same miles were worth $8,000 — a 400 percent markup. It’s how he got into the shady business of selling frequent flyer miles, and made an enemy of the airlines.

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“They told us it was illegal, but we found a way to do it legally,” he told Inc. Magazine in 2004. “It taught me that you don’t have to do what people tell you, no matter how powerful they are. A lot of times, we live by the limits that are given to us, and it stunts our potential.”

Because his customers tended to impulse-call, Claure made certain his staff was available 24-7, which required lots of cell phones. He famously walked into a retail store to purchase a cell phone, and wound up buying the retail business instead. Before long, Claure was the biggest cell phone distributor in New England. In 1997, he set his sights on the international market and founded Brightstar, a Latin American cell phone distributor based in Miami.

At the time, Latin America was in chaos — uprisings, drug wars, kidnappings, economic crashes were common — and the telecoms were retreating. Despite the risk and tight margins, Claure smelled opportunity. It was a hugely underserved market. Brightstar would do all the dirty work carriers didn’t want to do — Claure figured out all the logistics of operating with different currencies, government regulations, tariffs across South America. He built warehouses and operations teams to tackle problems as they emerged in real-time.

Claure, known as a hands-on operator who takes risks, soon dominated the South American market and expanded globally. By 2014, Brightstar was pulling in $10.5 billion a year in revenue, pitting carriers against one another and branching into new business lines. It caught the attention of Silicon Valley’s biggest whale — Masayoshi Son.

“King of the world”

Claure, who cuts an imposing figure at 6 foot 6 inches and lives in a bayfront mansion in Miami Beach, was introduced to Son in Tokyo in 2012. The meeting was supposed to be quick, but Son convinced Claure to delay his return flight, and the two businessmen worked out a deal to launch a used phone buyback program in Japan, according to Forbes. The following year, when Claure was planning to sell a portion or all of his company Brightstar, Son said he would buy it. Claure was handpicked by Son to run Sprint, the nation’s third-largest carrier, in 2014, and to shepherd a controversial merger with T-Mobile, the fourth-biggest carrier.

It’s not yet clear how much time Claure will be able to dedicate to WeWork. In addition to his role as COO of SoftBank Group, Claure leads its international operations and remains executive chairman of Sprint. Claure is also part owner and chairman of Inter Miami CF, the Major League Soccer team that is expected to start playing in March, as well as the chairman of Club Bolivar, Bolivia’s top soccer team. He also oversees the Miami-based SoftBank Innovation Fund, which plans to invest $5 billion in tech startups in Latin America.

“Marcelo wants to be king of the world,” Clay Parker, a lawyer who has represented Brightstar and Claure, told the Miami Herald in 2018. “I think Marcelo views that everything is a stepping stone to somewhere else, [and his] view [is] if he works hard, he can accomplish it.”

On Sunday, the Wall Street Journal reported that SoftBank, which owns one-third of WeWork, is aiming to invest several billion dollars in new equity and debt into the office startup, which would give it full control of the company. If SoftBank is successful, it would further reduce former CEO Adam Neumann’s voting power and give more operational control to Claure.

Claure has a vested interest in turning around the company. He controls 1.025 million shares of SoftBank as of March 31, according to his SoftBank bio. The shares are currently valued at about $19.9 million, based on a per-share price of $19.49 on Friday afternoon. That value has fallen from an all-time peak of $27.93 per share in early May, partly because of WeWork’s meltdown. That’s a 30 percent drop — or $8.7 million decline — in six months.

Having already invested $10 billion into WeWork, SoftBank needs stem the bleeding, or its stock will fall further and its Son’s upcoming Vision Fund II could suffer.

“The results still have a long way to go,” Son said of WeWork in an interview with Nikkei Business. “And that makes me embarrassed and impatient.”